China Construction Bank has selected Hong-Kong based Fusang digital exchange for issuing over $3 Billion worth of debt securities using blockchain. Both retail and institutional investors can now buy the offshore bonds using Bitcoin as well as the USD. The bonds will be issued by Longbond Ltd. that specializes in issuing digital bonds and depositing funds within the bank’s branch in Labuan, Malaysia. Issuing $3 Billion Worth Offshore Bonds On Blockchain As reported today by the South China Morning Post, the tokenized bond certificates will be issued through the bank’s Labuan Malaysia’s branch for a period of over three months. If the project turns out according to the plan, the Fusang exchange will work with the “Big Four” Chinese bank for issuing certificates in other currencies as well, including the Chinese yuan, as revealed in the report. Steven Wong, chief operating and financial strategist at CCB Malaysia, said that the purpose of the whole endeavor was to see whether it was technically possible to issue a bond on a blockchain through an exchange. Henry Chong, FUSANG Exchange’s chief executive, said: “Companies have issued blockchain-based bonds as a (proof of concept) before, but none of these bonds have ever been publicly listed and available to global investors including retail investors.” Trading Debt Securities for Retail Investors China Construction Bank is the second-largest bank in the world by market capitalization. The intention of the bank includes cutting out additional costs due to intermediaries. It also intends to offer retail investors debt instruments at a much lower amount. Bonds in China are traded for over $4000, mainly catering only for the institutional and professional investors. CCB intends to provide accessibility even for the retail investors by issuing certificates for a minimum of $100. SCMP report further highlighted that the bank will offer around 0.75% yield at maturity, higher than the average 0.25% interest achieved per annum at other banks.
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